The landlord returns to the Ukraine By Lem Harris Before the breakup of the Soviet Union, the Ukraine, about the size of France, was known as the bread basket of the Soviet Union. Today, elimination of all collective farms is underway. Ukrainian President Kuchma, by decree, and with no confirmation by the Ukrainian Parliament, removed all financial support, including production credit, from all collective farms. The decree includes the privatization of all collective farm land by assigning all such land in equal shares to former members of the collective. One does not need a crystal ball to foresee what will happen. The New York Times reports that one enterprising Cossack, Vasily Kluga, member of a dissolved collective, saw an opportunity and took advantage of it. Kluga, along with other members of his collective received title to acres of the collective by an earlier decree. That was a first step in the "reform" policy for doing away with collectives and opening the way for private ownership of farm land. Kluga moved fast. He borrowed money from what the Times correspondent characterized as a local "oligarch," that is one of the local insiders who bought some former state-owned enterprise for a song and is now comfortably rich. With this money, Kluga bought enough five-acre shares from his fellow members of the collective to accumulate title to over 200 acres. He also acquired necessary implements at fire sale prices. Of course, Kluga's oligarch was no philanthropist. He charged 40-percent interest on the loan, but Kluga was able to pay it off out of his harvest. Then Kluga made his big move. Like many others, his collective was bankrupt. Their bankruptcy was a direct result of government "reform" measures. Under Soviet conditions many collective farms were prosperous. I have visited collective farms in this very area near Poltava, where Kluga lives, as well as in many other regions. On a number of occasions I sat down with the accountant of a collective to examine a farm's financial reports. On one such farm in the North Caucasus, I still have the figures for the 1984 season showing the net profit of 2.5 million rubles for that year's operations. That profit was distributed as follows: . 30 percent for new construction of roads and buildings . 40 percent for new tractors, trucks and implements . 15 percent for bonuses (usually a 13th month wage payment) . vouchers covering low-cost vacations in mountain or seaside resorts . and new facilities for improving living standards . 15 percent to the state fund of the Ministry of Agriculture. At that time, living standards on well-run collective farms were equal to those of working families in the cities. But not any more. In both Russia and the Ukraine, the collective farms were sabotaged. Then Russian President Boris Yeltsin tried to issue decrees like Kuchma, but the Communist-dominated Russian Congress stopped him by passing laws protecting the collectives. However, often collectives had to wait many months before receiving payment for their grain and other farm products shipped to the government. During the delay in payment, inflation dropped the value of the ruble, resulting in a heavy loss for the farms. Also, for many years Yeltsin bypassed the collectives by buying dairy and meat products from abroad, seriously cutting in to the sales of domestically grown products. Kluga saw his chance when Kuchma issued a new decree last December privatizing all Ukrainian collective farms! The decree divided the title of the farms' land equally among the farm's members. All further support for the collective was terminated. At this point Kluga's collective offered him the chairmanship of the farm. But Kluga was not one to assume responsibility for the collective's large debt. So he made a counteroffer. The collective could become bankrupt, but he would rent the land now owned by the 120 members, about 1,200 acres, and pay this rent with shares of his harvest - a smart deal, worthy of a young Carnegie. In this way, the Times reports, he would bypass the collectives' debts and probably become owner of all the collective's land and equipment in about two years. The collective, with little other choice, accepted his offer and now Kluga controls 1,730 acres, nearly three square miles of rich farm land. Of course all was not clear sailing for Kluga. He had to borrow $10,000 more from the oligarch for fuel and additional equipment. "I am running a very big risk in taking another loan, for everything depends on a good harvest," he said. "If we are lucky, it will rain." Kluga's fortunes will depend on much more than rain. More critical will be how free enterprise Ukraine will determine grain prices. Will the "reform" policy copy the American experience and hold grain prices down to levels below his costs? If Kluga survives one is tempted to say he represents the return of "kulaks," the farmers in czarist days who exploited their poor neighbors. Kluga is already bigger than any kulak. He is the new landlord, like the hated czarist "pomestchoki." Working for him are 20 of the best workers of the former collective. These include 72-year-old Ivan Nimchin, a skilled combine harvester operator. "The old system was better," Nimchin said, "but it is nice to get a paycheck once more." Nimchin reminded me of an old man I met on my most recent trip to Russia. He was on horseback, herding cattle on the open prairie somewhere in the North Caucasus. His clothing was badly torn. "Look at me," he said. "I get paid almost nothing. Things were better under communism."
